Government plans to reduce cash and equity-based Isa allowances next year could cost regular ISA savers a sum in the order of around £180,000 in lost tax-free interest over their working lives, suggests Intelligent Finance.
The bank’s own study argues cutting the right to invest in a mini (cash) Isa allowance from £3,000 to £1,000 equates to lost txa-free interest worth around £180,000 over a 40-year period. Over a 20-year period, an individual who puts £3,000 into a mini-cash Isa could have earned an extra £30,000 of tax-free interest income. This amount rises again to £82,000 over 30 years, says IF. Calculations were based on interest earned from the Intelligent Finance Isa rate, which pays 5.1% interest, while research was conducted by ICM research on 1000 people in January 2004. IFAonline
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